Hot off the Press: the Fourth Circuit Court of Appeals just issued a decision arising out of a "Magic Pipe" case and the shipowner's attempt to post a bond allowing the offending vessel to sail. The case is Angelex, Ltd. v. United States of America and the opinion can be found here.
The United States is a signatory to the MARPOL treaty of 1978 which seeks to eliminated international pollution from the marine environment. To implement the treaty, Congress enacted the "Act to Prevent Pollution from Ships", codified at 33 U.S.C. 1901-15. The Act and the regulations implemented under the Act's authority require ships to maintain an Oil Record Book which records discharges of oil. During a Coast Guard inspection of Angelex's vessel, the inspector discovered that the oily water separator was bypassed and a crewmember advised the inspector that oily water was discharged. That discharge was not noted in the Oil Record Book.
As is customary, the Coast Guard requested that the Customs Service withhold "clearance" so that the vessel could not depart from the U.S. port. The Act does allow shipowners to post a bond which, if approved, would allow the vessel to sail. The Coast Guard and shipowner tried to negotiate a bond amount, but could not reach an agreed upon sum. The shipowner brought suit and with the judge's assistance reached an agreement as to bond amount, subject to approval by Coast Guard Headquarters. Headquarters did not approve the agreed-upon conditional amount. The judge issued an order directing the bond amount and other terms. The government appealed.
The Fourth Circuit overruled the district judge's decision. It found that under the Act to Prevent Pollution from Ships, the Coast Guard had fully discretionary authority to set the bond amount. Therefore, the courts had no jurisdiction under the Administrative Procedures Act. Also, because the statute had a provision that allowed a claim against the government for unreasonable detention. This safeguard against overreach by the government made the shipowner's requested injunctive relief to be beyond the federal court's power.